Ingersoll-Rand Q3 Profit Up 76%, Tightens 2014 Earnings Outlook

(RTTNews) - Diversified industrial company Ingersoll-Rand Co. Ltd. (IR) on Wednesday reported a 76 percent surge in profit for the third quarter from last year on higher revenues and margins.

Looking ahead, the company forecast earnings for the fourth quarter below analysts' estimates. The company also tightened its earnings outlook for fiscal 2014, but mostly below Street expectations, citing moderate growth in worldwide construction and modest growth in industrial markets for the remainder of the year.

Michael Lamach, Chairman and CEO of Ingersoll-Rand said, "Our focus on new product development, services and effective operational execution has enabled us to deliver another solid quarter. We are pleased with what we've been able to accomplish through steady investment, productivity initiatives and a balanced, pragmatic approach to capital allocation."

For the third quarter, net earnings attributable to the Dublin, Ireland-based company were $291.3 million or $1.07 per share, up from $165.9 million or $0.56 per share in the year-ago period.

The prior-year quarter's results included $46.9 million of after-tax restructuring and other one-time costs, equal to $0.16 per share.

Excluding restructuring costs, adjusted earnings per share for the latest quarter were $1.10, compared to $0.91 per share in the same period last year. On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $1.04 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter increased 5 percent to $3.39 billion from $3.21 billion in the same quarter last year. Analysts had a consensus revenue estimate of $3.35 billion.

Climate segment net revenues increased 6 percent from the prior-year quarter to $2.64 billion from a year ago, with bookings increasing 9 percent year-over-year. Industrial segment net revenues grew 3 percent to $741 million, with bookings also increasing 3 percent.

Total U.S. revenues increased 6 percent, and revenues from international operations grew 5 percent from last year. New equipment and aftermarket revenues were up 6 percent and 4 percent respectively.

Operating margin for the quarter expanded 120 basis points from last year to 13.0 percent.

Looking ahead to the fourth quarter, Ingersoll Rand forecasts earnings from continuing operations in a range of $0.68 to $0.72 per share, with restructuring expenses of $0.01 per share. The company also forecasts revenues to increase about 3 to 4 percent.

Street expects the company to earn $0.79 per share for the quarter on revenue growth of 3.9 percent to $3.22 billion.

For fiscal 2014, Ingersoll-Rand tightened its outlook for adjusted earnings from continuing operations to a range of $3.20 to $3.24 per share, from the prior range of $3.18 to $3.26 per share. The company affirmed its outlook for revenue to increase about 4 percent.

According to the company, the revised outlook is based on a forecast of moderate growth in worldwide construction and modest growth in industrial markets for the remainder of the year.

Analysts expect the company to report earnings of $3.24 per share for the year on revenue growth of 3.9 percent to $12.84 billion.

IR is currently trading at $57.44, down $0.90 or 1.54 percent on a volume of 905,163 shares.